Who pays for these "consumer benefits"? Something tells me the consumer.
EU drastically capped interchange fees a few years ago. The premise was that it will lower costs for merchants and effectively lower costs for consumers. However, most of the savings were kept by merchants, especially larger ones.
Some EU study confirming that: https://www.europeanpaymentscouncil.eu/news-insights/insight...
I remember when debit cards first came out in the US. There was actually a 1-2% surcharge that most merchants were charging (especially smaller mom/pop type stores) to use debits - because it cost them to use the payment system just like credit cards. Eventually the merchants just baked the processing fees into the prices of all goods because most transactions are done with cards. Even checks now are converted to an "ACH debit" at the checkstand and the funds come out of your account immediately. You can't float checks anymore, not that that was ever a good idea anyway.
Correct.
> Even checks now are converted to an "ACH debit" at the checkstand and the funds come out of your account immediately. You can't float checks anymore, not that that was ever a good idea anyway.
I don't know what checkstands are but I've never seen a check immediately pull from my account. (Just for example, I wrote a check Saturday and I'm sure the vendor deposited it immediately and it still hasn't posted to my account three days later.) In fact, that would be great, IMO. Instead anyone who wants immediate payment without the risk of a check not clearing (landlord first month's rent, or mortgage, or like a car) will demand a cashier's check or money order or wire, all of which are associated with an additional fee of $10-25. (Or will pull your credit to cover the float.)
In some countries and places, credit cards are not even accepted because of the possibility of a chargeback and much higher processing fees.
In essence, many people here treat Visa / MasterCard as just "electronic cash", and therefore spend only the money they actually have.
In my own EU country, only about 1% of private bank customers own a credit card. These are usually the wealthiest people in the country, who have no problems paying the balance back on time.
The credit cards themselves provide very few benefits apart from the international health insurance for the entire family, and 0% fee for up to 45 days.
The reward programs are almost non-existent. Just like the general idea of spending the money one doesn't have.
It might sound like a very conservative society, but people here are a way more relaxed about their personal finances than in the US.
Instead of trying to earn reward points, they try to plan their expenses upfront, and focus on staying debt-free as much as they can.
That's because most Europeans have stable jobs with stable salaries which can neither grow, nor decline by a lot. Therefore, almost nobody expects to become very rich or very poor, and lives accordingly.
I don't claim to be a typical credit card user, but I do like to game their system and make money off of them (paid for by people NOT paying their balances off monthly and racking up dumb fees). I don't see a downside to it. It's not like they're getting more data on me by using a rewards card. They already know all of the purchases I make with them.
At the same time, I am glad that the EU provides a more conservative alternative and style of living.
I think the US is more about getting rich, and the EU is more about not becoming poor.
And for a money-savvy person the US might provide much more opportunities than the EU can.
Yet, the majority of people are not money-savvy, and the "high risks, high rewards" game inevitably produces more losers than winners.
That's probably because people pay online only at a very limited number of places they trust, and it's easier to solve issues with the local merchants directly.
Another reason might be, that many online payments are made via direct bank tranfers / SEPA, which can be both, fee-free and instant, across the entire EU.
Essentially, everything is based on trust. Nobody puts his debit / credit card details into a form of a website he never heard before, and nobody risks his business reputation if he has managed to earn it.
what makes you think debit cards are less safe than credit cards? as far as I know here in EU all debit cards are smart cards with PIN code protection, what exactly is the unsafe part?
are you confusing debit cards with magstripe cards?
I don't use a CC in Europe so I can't comment on how expensive those are here.
As for who is paying for it? Once you have a payment system set up its really not that expensive to maintain it. Driving around armoured vans with money is actually more hassle.